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Just two months after Ricky Sandler of Eminence Capital was nominated to stand for election to Tailored Brands Inc (NYSE:TLRD)‘s board, the hedge fund has completely bailed on its large investment in the clothing company, disclosing in a regulatory filing on Friday that it no longer owns any shares of Tailored Brands, the holding company that owns Men’s Warehouse (which the company was also previously called) and JoS. A. Bank Clothiers.

In a filing on April 6, the hedge fund revealed that Sandler would not stand for election to the company’s board at its 2017 Annual Shareholders Meeting, citing time constraints related to his executive obligations and other investments. Eminence Capital owned 7.25 million Tailored Brand shares at that time, constituting a 14.9% stake in the company. The investment has proven to be a huge disaster for the fund this year, as the stock has crumbled by nearly 50%.

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Sandler was instrumental in the merger of Men’s Warehouse and JoS. A. Bank back in 2014, which eventually led to its 2016 reorganization into the holding company Tailored Brands. He was a large shareholder of Men’s Warehouse at the time, as well as holding a minority stake in JoS. A. Bank, and fought proxy contests against both companies to ensure the merger’s eventual completion.

Shares of Tailored Brands peaked at $27.18 on December 9 before cracks started appearing in the company’s armor. Tailored Brands unexpectedly reported on December 13 that CFO Jon Kimmins would leave the company after four years to pursue other interests, raising a red flag for investors. Shares sank beneath $20 by the end of January before a mild recovery in February.

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However, a disastrous fourth-quarter earnings report released on March 3 (the first since Kimmins’ departure, and corresponding to the quarter during which he abruptly left the company), sent shares crashing to less than $15. Revenue fell by 3.9% year-over-year during the quarter, while comparable sales declined by 1.2%. Revenue and earnings both widely missed analysts’ expectations as well.

Whether those startling results played a factor in Sandler’s eventual decision to flee the stock is up for debate, but it’s certainly another blow for the company that one of its biggest supporters, and a man instrumental in the formation of the company in its current form, no longer feels compelled to be an investor of it.

Ricky Sandler

Eminence Capital

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